One-Stop-Shopping hinders Specialization?

Max Riegel ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: I study how consumer preferences for one-stop-shopping affect the resource allocation of multiproduct firms. In many markets, consumers prefer to buy multiple products at a single seller. At the same time, multiproduct firms have to split their resources between their products, for instance by allocating R&D budgets or shelf space. One-stop-shoppers treat firms’ products as if offered as bundles. If there are only one-stop-shoppers, firms therefore cannot gain from a comparative advantage over a particular product. I show that firms become more inclined to specialize in different products and gain market power, as the share of one-stop-shoppers decreases. Thereby, industry profits rise, potentially to the detriment of consumers.

Keywords: one-stop-shopping; specialization; multiproduct competition (search for similar items in EconPapers)
JEL-codes: D43 L13 L81 (search for similar items in EconPapers)
Pages: 16
Date: 2025-09
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